Honest mistake, guv, honest
ONCE-MIGHTY DELL ended up in court in May charged with ripping off its customers in Washington State, USofA, to the tune of $24 million in sales tax. The court ordered that every penny shuld be repaid.
The case slipped under the INQ's radar, so we're grateful to
Bob Sullivan over at MSNBC for sniffing out the facts.
As Bob says, in the connected world the consumer relies on the operators of a web site to apply the correct taxes on purchases, especially if you're dealing with a big, um, reputable outfit like Dell.
The overcharging occurred from 1999 to 2005, during which period some 470,000 customers in Washington State were affected.
And one lawyer in the affair reckons that when cases in other states are looked into Dell could be looking at a final bill in the order of $100 million.
But, since Dell claims to have made an honest mistake in Washington, it says it will have already handed the cash over to the Washington taxmen.
Lawyer Rick Ellis, however, doubted Dell's word and, in Massachusetts, filed suit under the state's deceptive trade practices law.
The taxes relate to maintenance contracts, warranties and the like and the different taxation levels applied to different sorts of contract.
Maintenance contracts attract sales tax because the maintainer actually has to do some work to honour them. Extended warranties are treated like insurance policies because like most insurance policies the insurer usually has to do nothing except take the money and run.
Dell, it seems, charged sales tax on warranties and like and so ended up in the current pickle. The Washington State class action is the only one yet settled. Further class actions could follow in a number of other states, although one suit in Maine has already been dismissed.
The INQuirer
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